Talking about the analysis method of electronic photographic printing ink market

What is "potential demand" and "potential industry income (PIE)?"

The concept of "potential demand" is very vague, and "potential" means that something is in some hidden state, not easy to be discovered, or people have not yet realized its existence. The economic concept of “demand” refers to certain demographic indicators or market requirements for different prices, different specifications, quality, supply, and other factors. “Latent demand” is generally defined by economists as the industrial income of a certain market, and such market is often rational, active and full of competition. If the market is productive, then the "potential demand" is a measure of PIE (ie, potential industrial income) or gross national product (not total profit). It often reflects directly the gross national product contributed by the company. "Market" is defined as a specific part of the value chain. There are potential demands for various industries, such as: retail, wholesale, manufacturing, and raw material supply.

The "potential demand" of electronic photographic printing inks is not an increase in actual sales or a potential demand for future sales. In fact, if a market lacks production efficiency, "potential demand" will be lower or higher than actual demand. The lack of production efficiency is caused by many factors, including the lack of international open cooperation, cultural differences in the consumer field, market rules, and traditional corporate behavior. Nevertheless, in general, "potential demand" will still be higher than the actual sales of a country.

In the discussion, we found that the study did not consider the "money unit" factor, but only the potential revenue. The unit of currency used in the report is the U.S. dollar, which does not take into account inflation and future currency exchange rate adjustments. If the currency exchange situation or the inflation situation changes greatly, the actual sales volume will exceed the potential sales volume (using the US dollar for research, without considering inflation). On the other hand, potential demand tends to be higher than actual sales, because the market often affects actual sales due to lack of production efficiency, making it less than potential demand.

As mentioned in the introduction, this study mainly focuses on the natural form of the market. It is an overall and long-term perspective that does not consider human factors and product factors in this market. In fact, all forms of products or services in the current market may be eliminated, and everyone can be replaced by other companies (through exports, imports, mergers, bankruptcy, etc.). The global potential for electronic photographic printing inks will still exist. Production and supply conditions and human factors are not important factors in assessing potential demand.

In order to assess the potential demand for electronic photographic printing inks worldwide, I used a multi-angle approach. Before using this method, we must first understand the basic theory of this assessment. In this case, some economic assumptions are mainly used. In particular, there is an assumption that directly controls the types and forms of potential needs. The "potential demand" affects the income of the country, city, family, or individual's actual consumption. Once balanced, "potential demand" will have an impact at all levels of the value chain. For a market-oriented company, because it senses the "potential demand" of the market and tries to meet it, it wants to increase profits. Because of the "potential demand," the only variable that determines the total amount of consumption is the consumer's income level (whether or not they are on the top of the value chain). Other factors affecting the demand curve include changes in external conditions (such as business operations) and product improvement as required.

Now, let us temporarily ignore the changes in external circumstances. The relationship between income and consumption has become a central issue for economists. In the 1930s, John Meynard Keynes suggested the following assumption: As income rises, the average propensity to consume falls. The average consumption tendency refers to the level of consumption determined by the level of income, or the sloping line from the origin to the consumption index. He put forward this hypothesis on the basis of experience, and proved the correctness of the hypothesis by short-term facts. That is, the higher the income level, the lower the average consumerism tendency. In the 1940s, another economist, Simon Kuznets, proposed the long-term consumption function, which shows that the marginal tendency of consumption is very stable (refer to the long-term economic figures of each country). That is, the average propensity to consume is stable.

Is the propensity to consume stable or changing? Other economists, in particular Franco Modigliani and Milton Friedman, explained in the 1950s why the two hypotheses using different research methods would be so different. The shorter the timeline (that is, the shorter the study reference time), the greater the impact of consumption on the assets currently owned (earned for the past few years) and commercial operations. However, in the long run, the propensity to consume is quite stable. The debate surrounding the relationship between income and consumption is very interesting. In this study, a special school was created. We have accurately referenced the situation in 230 countries to study the potential demand for electronic photosensitive printing inks. The smallest of these countries also has 10,000 residents. I assume that all these countries meet the long-term consumption function. This long-term consumption function does not take into account existing wealth in some countries, and the wealth that is now earned determines the potential demand for electronic photographic printing inks. So, the long-term potential demand curve starts from zero. Despite this, I allow companies to have different propensity to consume (including different curves in the consumption function, which can show the difference between the choices of the industrial organization and the end-user). After presenting this most important assumption, I will now describe the electronic The potential demand for photosensitive printing inks.